DRIVING GEOPOLITICAL RISK + GLOBAL MARKETS
WHAT YOU NEED TO KNOW
APAC Mondays - January 30, 2017
Political Risk in Asia: Context and Catalysts -The Diplomat
Q. What do you see as the top five key political risks in Asia for 2017?
1. China oversteps its bounds while flexing its muscles, sparking widespread condemnation in Asia and beyond, and heightening tension throughout the region.
2. The U.S. overcompensates for missing the mark in implementing its Asia Pivot and ramps up its military presence in the South China Sea, which would also heighten regional tension.
3. North Korea successfully launches long-range ICBMs [inter-continental ballistic missiles], prompting a stern response from the U.S., leading either to a threat of war or another effort at multilateral talks.
4. Indonesia fails to successfully manage its Muslim extremist groups and regional terrorism rises.
5. Myanmar’s “experiment” with democracy proves to be a failure and the military takes over control of the government.
Military Tensions and Government Stability Mark a Year of Risk -Bloomberg
Xi, Trump share same Achilles' heel Both play favorites, surround themselves with yes men -Nikkei
Premier Li Keqiang: Economic openness serves everyone better
-China.org [full speech]
“Above all, we remain convinced that economic openness serves everyone better, at home and abroad. The world is a community of shared destiny. It’s far preferable for countries to trade goods and services and bond through investment partnerships than to trade barbs and build barriers.”
Beijing Pushes Back on Over Disputed Islands in South China Sea
"There might be a difference" of opinion regarding who has sovereignty over the islands in the South China Sea, "but that's not for the United States" to get involved -NBC
As Trump retreats on trade, China moves in America’s traditional partners already are turning to Beijing. -Politico.eu
HONG KONG RISK
At Hong Kong New Year Fair, Defiance Gives Way to Resignation -NYT
Hong Kong people must understand the limits of their autonomy as a Chinese special administrative region Alan Hoo says persistent opposition to NPC interpretations of the Basic Law – a national law – stems from mistaken ideas about the parameters of Hong Kong’s autonomy -SCMP
Abe, Trump agree to hold summit on Feb. 10 -The Japan Times
Trump to seek quick progress with Japan's Abe on replacement trade deal President Donald Trump will seek quick progress toward a bilateral trade agreement with Japan in place of a broader Asia-Pacific deal he abandoned this week -Reuters
Japan says preparing for all possible U.S. trade contingencies -Reuters
Japan should push for Asian cooperation in absence of effort by Trump, expert says -The Japan Times
Taiwan's visa waiver status unaffected by Trump's immigration order: AIT -The China Post
Taiwan Expansion Picks Up as Exports Counter Slower Spending The island’s economy has shown signs of resilience in the past year as it recovered from three quarters of contraction that ended in March.-Bloomberg
Chinese billions fail to sway Taiwan’s last two allies in Africa Taiwan’s last two African allies have no plans to switch allegiances and break ties with Taipei -The Japan Times
SOUTHEAST ASIA RISK
Philippines says U.S. military to upgrade bases, defense deal remains intact -The Japan Times
Survey: Filipinos want their rights asserted in disputed sea The Dec. 6-11 survey by independent pollster Pulse Asia showed 84 percent of 1,200 adult Filipinos polled nationwide agreed the government should uphold its rights in the disputed waters. -The China Post
SURVEY HERE >> -Pulse Asia Filipinos Views on Foreign Policy
Singapore climbs to 7th on global least-corrupt index Singapore has moved up a notch in an annual ranking of countries deemed the least corrupt.
FULL INDEX HERE >> Corruption Perceptions Index 2016
Singapore needs to base its growth on productivity and innovation -The Straits Times
The Resurgence of China-Vietnam Ties A visit to Beijing by Vietnam’s Communist Party chief underscored a major shift in Sino-Vietnamese bilateral relations. -The Diplomat
Vietnam hopes third, fourth child will be the economic charm Ending two-child policy could boost birthrate and spending -Nikkei
APAC || GLOBAL MARKETS IMPACT + OPPORTUNITY
What China Can Learn From Trump’s Spat With Mexico -Bloomberg (video)
Toshiba Chips Make for Tasty Chinese Takeout Chinese investors, though, won't face any antitrust concerns and likely have a far bigger appetite for accepting instability as the price for getting a seat at the table. Lack of strategic access wouldn't be ideal, but this could be seen as a first entree into the market. -Bloomberg
Chinese buyers still optimistic about M&A in the U.S. Chinese investors, however, don't seem too worried yet about Trump and his impact on cross-border mergers and acquisitions. -Axios
Jack Ma's Ant Financial buys an American colony -Reuters
Foreign workers in Japan hit the 1 million mark for the first time last autumn: ministry -The Japan Times
Foreign direct investment growth in Indonesia slows in Q4 Foreign direct investment (FDI) into Indonesia rose 2.1 percent on an annual basis in the fourth quarter of 2016 in rupiah terms, slowing significantly from the 7.8 percent pace the previous quarter -Reuters
Antam faces test as Indonesia shifts mining policy Resumption of nickel exports may upend corporate plans -Nikkei
Vietnamese Factories Hum at Full Capacity Despite Trump Snub Clothing maker NhaBe Garment Corp. had a lot riding on the TPP. The supplier to brands such as Calvin Klein, Michael Kors and Kenneth Cole has seen its exports more than doubled since 2011 to $729 million last year -Bloomberg
Japan's Dirty Secret
Q. Which country was the world's biggest coal importer in 2015?
If you're tempted to believe it's dirty old China, think again. Japan -- home of the Toyota Prius and the world's largest floating solar-power farm -- shipped more coal than its neighbor across the East China Sea in 14 out of the past 24 months. -Bloomberg Gadfly
Banking Watchdog Calls for Closer Scrutiny on Overseas Investment China’s top banking regulator issued guidelines Wednesday instructing the country’s financial institutions to tighten their risk control of funding for overseas investment amid a foreign buying spree by Chinese companies.
China’s forex regulator unveils new channels to attract capital inflows China has ramped up measures to enable funds to flow back within its borders, in what analysts say is an attempt to combat capital flight and the downward pressure on the yuan. -SCMP